Overview
Paddle is a merchant of record for digital product businesses. It is the seller on each order, so it registers for, collects and remits sales tax and VAT across its markets, handles fraud and chargebacks, and supports your customers on payment and cancellation questions. Paddle says it remitted $130 million in sales taxes last year and serves 10,000+ customers.
Pricing is a single all-inclusive 5% + 50¢ per checkout transaction. Paddle's own comparison argues that building the same stack on a processor adds tax, billing, international card and fraud fees that total around 7% or more; the exact comparison depends on your country and buyer mix.
Subscriptions, localized checkout, multiple currencies and payment methods are included. ProfitWell Metrics and Retain (failed-payment recovery and cancellation flows) are part of the platform. Low-priced products under $10 and B2B invoicing are on custom pricing, which matters for cheap apps and templates.
Pricing and plans
| Plan | Price | What you get |
|---|---|---|
| Pay-as-you-go | 5% + 50¢ | Per checkout transaction; no migration, monthly or hidden fees |
| Custom pricing | Custom | For scaling businesses, products under $10, or invoicing; adds premium services and migration support |
What it does
- Merchant of record
- Paddle sells to your customers and takes on sales tax, VAT, and payment regulation compliance.
- Subscription billing
- Plans, trials, upgrades and proration included in the transaction fee.
- Localized checkout
- Embeddable or overlay checkout in local currencies and payment methods.
- Retain
- Failed payment recovery and cancellation reduction for subscriptions.
- ProfitWell Metrics
- Real-time subscription, retention and growth metrics.
- Buyer support
- Paddle handles customer queries about payments, subscriptions and cancellations.
Strengths and limitations
Strengths
- One rate covers payments, billing, tax and fraud
- Sellers can be based almost anywhere outside sanctioned regions
- Long track record as a software merchant of record
- No extra charge for subscriptions or international cards
Limitations
- Products under $10 require custom pricing
- Invoicing requires custom pricing
- 5% + 50¢ is more than processing alone for sellers with mostly domestic sales
- Built for software and digital products; other product types are not the focus
Who it suits
Good for
- SaaS and desktop software selling worldwide
- Solo founders who do not want VAT and sales tax registrations
- Mobile apps adding web checkout
Look elsewhere if
- Physical goods or services
- Very cheap products under $10 without negotiating a custom rate
- Businesses selling mostly in one country where their own tax filing is simple
Alternatives to Paddle
| Tool | From | Free option | Stages |
|---|---|---|---|
| Lago Open-source usage-based billing | — | ||
| Stripe Billing Subscription billing | Usage-based | ||
| Razorpay Payment gateway (India, plus US, Singapore, Malaysia) | Usage-based | ||
| Stripe Payments Payment processor (API-first) | Usage-based | ||
| Chargebee Subscription and usage billing | Usage-based | ||
| PayPal Braintree Payment processor (gateway and merchant account) | Usage-based |
Questions
How much does Paddle charge?
5% + 50¢ per checkout transaction, which includes payments, subscriptions, tax compliance and fraud protection.
Is Paddle a merchant of record?
Yes. Paddle is the seller of record and collects and remits sales tax and VAT for you.
Can I use Paddle from outside the US or EU?
Yes. Paddle works with software businesses anywhere except the countries on its unsupported list.
Does Paddle charge extra for subscriptions?
No. Subscription billing is included in the 5% + 50¢ rate.
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